Hudbay Minerals Inc · TSX:HBM
Hudbay Minerals — 2015 TD Securities Mining Conference
38 slides from Hudbay Minerals's conference presentation, January 2015
Slide 1: According to Plan - 2015 TD Securities Mining Conference
ACCORDING TO PLAN 2015 TD Securities Mining Conference January 2015 HBM
Slide 2: Cautionary Information
Cautionary Information This presentation contains "forward-looking statements" and "forward-looking information" (collectively, "forward-looking information") within the meaning of applicable Canadian and United States securities legislation. All information contained in this presentation, other tha
Slide 3: Cautionary Information (continued)
Cautionary Information (continued) The risks, uncertainties, contingencies and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information may include, but are not limited to, the development of the Rosemont project not occurrin
Slide 4: Cautionary Information (continued)
Cautionary Information (continued) The scientific and technical information in respect of Hudbay contained in this presentation related to the Constancia project has been prepared by or under the supervision of Cashel Meagher, P.Geo., Hudbay’s Vice President, South America Business Unit. The scienti
Slide 5: About Hudbay
About Hudbay TSX, NYSE, BVL Symbol HBM Integrated base and precious metals mining Market Capitalization1 $2.4 billion company Shares Outstanding 234 million > Operating mines, development projects and processing Available Liquidity2 $0.6 billion facilities located in the Americas Debt Outstanding2 $
Slide 6: Recent Achievements and Challenges
Recent Achievements and Challenges ACHIEVED OUR GROWTH OBJECTIVES IN 2014 Copper production and operating cost guidance achieved 777 2014 zinc and precious metal production below guidance Production Commercial production achieved ahead of Reed guidance and under budget Achieved commercial pr
Slide 7: Near-Term Production Growth
Near-Term Production Growth1 OPPORTUNITY FOR A RE-RATE IS SIGNIFICANT AS WE DELIVER GROWTH 320% Increase in Cu 145% Increase in 50% Increase in Zn Production Au-Eq. Production2 Production (kt) (koz) (kt) 200 250 150 200 150 100 150 100 100 50 50 50 - 3 - - 3 3 2014A 2015G 2016E 2014A 2015G 2016E 201
Slide 8: Copper Reserves and Resources per Share
Copper Reserves and Resources per Share1 CONSISTENT GROWTH IN CU-EQ RESERVES AND RESOURCES PER SHARE 100 100 Cu-Eq. lbs per share 75 Cu-Eq. lbs per share 75 25 2P Reserves 45 M+I Resources 50 4 Inferred Resources 50 Historical 2P Reserves2 41 40 37 Historical Inferred Resources2 25 25 17 10 5 - 3 9
Slide 9: Constancia Project
Constancia Project PROJECT COMMISSIONING Life of Mine1 Ownership 100% Close to 21 million man- hours worked with only Daily ore throughput 80k tpd one lost time accident in Avg. annual Cu production2 82k tonnes 2014 Cash cost per Cu lb3 US$1.25/lb Mine and mill unit cost4 US$7.48/tonne Physical
Slide 10: Constancia Construction Progress
Constancia Construction Progress Constancia mine maintenance facilities Crushed ore to be processed in Constancia mill Constancia mill Constancia flotation cell INVESTOR PRESENTATION l 10
Slide 11: Constancia Construction Progress (Cont'd)
Constancia Construction Progress (Cont’d) Constancia crusher commissioning Constancia ore dump pocket for the primary crusher Initial copper concentrate stored in concentrate shed INVESTOR PRESENTATION l 11
Slide 12: 777 Mine
777 Mine STEADY, LOW-COST PRODUCTION Life of Mine1 > 6 lost-time accidents over past 6 years Ownership 100% > Mature mine with steady cost performance Daily ore throughput 4,500 tpd > Exploration to focus on recently optioned War Baby Avg. Annual Cu production2 25k tonnes claim Avg. Annual Zn produc
Slide 13: Lalor Mine
Lalor Mine Life of Mine1 PRODUCTION; PHASE 2 RAMP-UP Ownership 100% Over 1,000 days without a lost-time Daily ore throughput 3,300 tpd accident Avg. annual Zn production2 59k tonnes Avg. annual Au-Eq. production2 43k ounces Main production shaft complete and Avg. annual Cu production2 5k tonnes
Slide 14: Lalor Exploration
Lalor Exploration DRILLING OF CU-AU ZONE COMMENCED IN Q4 2014 Lalor Cross-Section with Exploration Platform 0m Underground drill program Production underway Shaft > Test down plunge potential of gold and copper-gold 500m zones > Determine optimal location Exploration to advance exploration Platform
Slide 15: Reed Mine
Reed Mine COMMERCIAL PRODUCTION ACHIEVED Life of Mine1 > 2-year construction program completed Ownership 70% Daily ore throughput 1,300 tpd with no lost-time accidents Avg. annual Cu production2 15k tonnes > Achieved commercial production ahead Cash cost per lb Cu3 $1.64/lb of guidance and under bud
Slide 16: Rosemont Project
Rosemont Project 80%-OWNED1 COPPER PROJECT IN ARIZONA, USA Hudbay acquired control of the Rosemont project in July 2014 > Ideal fit with Hudbay’s disciplined growth strategy > Drill program completed to better understand the geological setting and mineralization, and to collect additional technical
Slide 17: Global Positioning on 2018E Cash Costs
Net Cash Costs (US$/lb Cu) Copper Production (bn lbs) $0.00 $1.00 $1.50 $2.50 $0.50 $2.00 0.0 4.0 1.0 2.0 3.0 Southern Cu Freeport Chinalco Codelco Russian Cu Glencore Source: Wood Mackenzie Hudbay (2018) BHP Hudbay (2018) PF First Quantum Private Southern Cu MMG Rio Tinto Jiangxi Cu KGHM OZ Mineral
Slide 18: Why Invest in Hudbay?
Why Invest in Hudbay? HIGH QUALITY COPPER GROWTH STORY Imminent sector-leading copper production growth High quality copper and zinc producer with leverage to strengthening longer- term metal market fundamentals Attractive operating cost structure and improving unit margins with ramp up of new
Slide 19: Appendix
Appendix INVESTOR PRESENTATION l 19
Slide 20: Appendix Contents
Appendix Contents By-product copper and zinc cost curves Global refined metal market balance Growth of mineral deposits 2015 guidance Precious metals stream Reserves and resources INVESTOR PRESENTATION l 20
Slide 21: Copper & Zinc By-Product Cost Curves
Copper & Zinc By-Product Cost Curves1 250 Constancia (LOM) 200 C1 Cash Cost (100 x US$/lb) 150 100 Reed (LOM) 50 777 Mine (LOM) 0 0 10 20 30 40 50 60 70 80 90 100 -50 Cumulative Percentile Production (%) -100 Lalor (LOM) -150 777 Mine (2013) -200 -250 Cu Cash Cost Zn Cash Cost Source: Wood Mackenzie
Slide 22: Global Refined Metal Market Balance
Global Refined Metal Market Balance Copper Zinc 200 Refined Metal Balance (000 tonnes) 100 0 2014 2015 2016 2017 2018 2019 -100 -200 -300 -400 -500 Source: CRU, Copper Market Outlook January 2015, Zinc Market Outlook October 2014 By 2019, both copper and zinc refined metal markets are expected to be
Slide 23: Growth of Mineral Deposits
Growth of Mineral Deposits Discoveries in the Greenstone Belt Flin Flon ∕∕ 62.5 Lalor Trout Lake 777 Stall Lake Chisel U/G Callinan Chisel Osborne Anderson Konuto Spruce Schist Lake Centennial Westarm Chisel Pit Coronation White Lake Dickstone Rod Initial resource Photo Added resource Ghost & Lost C
Slide 24: 2015 Production and Unit Cost Guidance
2015 Production and Unit Cost Guidance Contained Metal in Concentrate1 2015 Guidance 2014 Production 2014 Guidance Manitoba2 Copper Tonnes 40,000 – 50,000 37,644 36,000 – 45,000 Zinc Tonnes 95,000 – 120,000 82,542 87,000 – 105,000 Precious Metals3 Ounces 85,000 – 105,000 85,703 99,000 – 120,000 Comb
Slide 25: 2015 Production and Unit Cost Guidance
2015 Production and Unit Cost Guidance Flin Flon Zinc Plant Zinc Concentrate Treated 190,000 – 235,000 tonnes Zinc Metal Produced 95,000 – 120,000 tonnes Unit Operating Costs1 C$0.31 - $0.38/lb 1 Forecast unit operating costs are calculated on the same basis as reported unit operating costs in Hudba
Slide 26: 2015 Capital Expenditure Budget
2015 Capital Expenditure Budget1 C$ Millions Sustaining Capital Manitoba 140 Peru 180 Total Sustaining Capital 320 Growth Capital Arizona 60 Peru 10 Total Growth Capital 70 Capitalized Exploration 35 Total Capital Expenditure 425 1 Excludes pre-production revenue, capitalized interest and capitalize
Slide 27: 2015 Exploration Budget
2015 Exploration Budget C$ Millions Manitoba 20 Peru 5 Arizona 10 Generative and Other 20 Total Exploration Expenditures 55 Capitalized Spending1 (35) Total Exploration Expense 20 1 Assumes $20 million allocated to “Generative and Other” will be capitalized INVESTOR PRESENTATION l 27
Slide 28: Precious Metals Stream Overview
Precious Metals Stream Overview US$750 million in upfront deposit payments from Silver Wheaton for delivery of: 100% of payable gold and silver from 777 mine until the end of 2016; and 50% of payable gold and 100% of payable silver thereafter for the remainder of life of mine 100% of payable s
Slide 29: Peru Reserves Overview
Peru Reserves Overview As at January 1, 2014 Constancia Mineral Reserves Category Ore (M tonnes) Cu (%) Mo (g/t) Au (g/t) Ag (g/t) Proven 483 0.32 93 0.040 3.04 Probable 94 0.22 61 0.036 2.77 Pampacancha Mineral Reserves Category Ore (M tonnes) Cu (%) Mo (g/t) Au (g/t) Ag (g/t) Proven 23 0.52 142 0.
Slide 30: Peru Resources Overview
Peru Resources Overview As at September 30, 2013 Constancia Mineral Resources Category M (tonnes) Cu (%) Mo (g/t) Au (g/t) Ag (g/t) Measured 68 0.22 59 0.036 2.17 Indicated 293 0.20 58 0.033 1.96 Inferred 200 0.19 51 0.031 1.86 Pampacancha Mineral Resources Category M (tonnes) Cu (%) Mo (g/t) Au (g/
Slide 31: Manitoba Mineral Reserves
Manitoba Mineral Reserves As at January 1, 2014 Category Tonnes Cu (%) Zn (%) Au (g/t) Ag (g/t) 7771 Proven 4,893,000 2.27 4.01 1.84 24.71 Probable 5,707,000 1. 34 4.24 1.79 24.69 Lalor – Base Metal2 Proven 1,332,000 0.73 8.99 1.53 17.49 Probable 11,334,000 0.68 7.81 1.56 23.77 Lalor – Gold Zone Pro
Slide 32: Manitoba Mineral Resources
Manitoba Mineral Resources As at September 30, 2013 Category Tonnes Cu (%) Zn (%) Au (g/t) Ag (g/t) 7771 Inferred 784,000 1.05 4.49 1.77 30.61 Lalor – Base Metal2 Inferred 3,832,000 2.04 5.77 3.47 21.24 Lalor – Gold Zone Inferred 6,281,000 0.42 0.49 4.70 31.48 Reed Inferred 233,000 4.31 0.52 0.38 4.
Slide 33: Copper Equivalent Reserves and Resources
Copper Equivalent Reserves and Resources1 All Metals Project Category Cu Equivalent (000 tonnes) 2014 2013 Change Constancia2 Proven & Probable 2,655 2,263 392 Measured & Indicated 1,045 1,329 (284) Inferred 503 593 (90) Lalor Proven & Probable 663 705 (42) Inferred 483 579 (96) 7773 Proven & Probab
Slide 34: Precious Metal Equivalent Reserves and Resources
Precious Metal Equivalent Reserves and Resources1 Project Category Au Equivalent (000 ounces) 2014 2013 Change Constancia2 Proven & Probable 2,341 1,951 390 Measured & Indicated 972 1,132 (160) Inferred 441 520 (79) Lalor Proven & Probable 1,209 1,137 72 Inferred 1,557 1,753 (196) 7773 Proven & Prob
Slide 35: Additional Information
Additional Information The reserve and resource estimates included in this presentation were prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum Standards on Mineral Resou
Slide 36: Peru
Peru For additional details relating to the estimates of mineral reserves and resources at the Constancia project, including data verification and quality assurance/quality control processes refer to “The Constancia Project, National Instrument 43-101 Technical Report” as filed on SEDAR by Hudbay
Slide 37: Rosemont Historical Reserves and Resources
Rosemont Historical Reserves and Resources1 As at August 28, 2012 Historical Mineral Reserves Category M (tons) Cu (%) Mo (%) Ag (opt) Proven 308,075 0.46 0.015 0.12 Probable 359,131 0.42 0.014 0.12 Historical Mineral Resources (inclusive of historical mineral reserves) Category M (tons) Cu (%) Mo (
Slide 38: For more information contact
Night view of Constancia crusher For more information contact: Jacqueline Allison Director, Investor Relations Tel: 416.814.4387 Email: jacqueline.allison@hudbayminerals.com HBM
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